Reporter Jim Gray Paid By LeBron Entity, Not ESPN

(Ed. Note, July 12, 2010: It was originally reported by CNBC and later by Bloomberg that Jim Gray would be reimbursed for his expenses and receive an additional payment for his work on ESPN's LeBron James special last Thursday night. Now, CNBC is being told by its primary source and by Gray that the two payments are one and the same and he is only being compensated for his expenses).

As Jim Gray has told it, it was his idea to make LeBron James' free agent plan an hour special. He took the idea to James' marketing agent Maverick Carter of LRMR, who then worked with William Morris Endeavor to put the package together in front of ESPN executives.

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Jim Gray (L) of ESPN speaks with LeBron James at attends the LeBron James Pre Decision Meet and Greet on July 8, 2010 in Greenwich, Connecticut.

ESPN didn't play down one part of the business arrangement of the deal — that Gray, the former ESPN and NBC reporter who is now working on a freelance basis, was James' preferred interviewer.

But the network didn’t say, and now says it didn't know, that Gray's travel and payment for "The Decision" show was being paid by the entity set up by Team LeBron and not by ESPN, as CNBC has learned.

“We aren’t privy to Gray’s arrangement,” said ESPN spokesman Mike Soltys. “He came as part of the package. We accepted Jim knowing that we would have extensive time for our people to interview LeBron, which was the bulk of the show.”

Gray’s interview in the show was widely criticized. Richard Sandomir of the New York Times panned the order and the timing of Gray’s questioning, saying that it took six minutes and 18 questions before asking on what team James would next play. USA Today’s Mike McCarthy called the six minutes before Gray asked the most important question “excruciating happy talk.”

As part of the partnership, ESPN turned over some of the advertising inventory in the show to James’ team to sell commercials to the likes of the University of Phoenix, Bing and Vitaminwater. James’ team said it would donate $2.5 million from the proceeds of the ads to the Boys & Girls Clubs of America.

The eight brands featured within the show garnered $2.9 million in equivalent advertising time, according to Joyce Julius & Associates, a sponsorship evaluation firm.

The exclusive broadcast received a 7.3 overnight rating, which is a huge number. The final rating will be out later today.

Update 1: ESPN spokesman Mike Soltys says that ESPN did in fact pay Gray's travel and Keith Estabrook, LeBron's publicist, said that LRMR, James' marketing agency did not directly pay Gray. CNBC stands by its story that Gray was paid by the entity that was set up for the production.

Update 2: Attempts to reach Gray by phone and e-mail were not successful, but Gray told Bloomberg reporter Michele Steele on her Twitter account that he did receive "a small stipend and the rest went to charity."